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Will TCHC tenants be short-changed?

October 4, 2011

Say it isn’t so.

The scuttlebutt is that Toronto Community Housing has been asked to cut its 2012 budget by 10%.

On the face of it, a 10% cut might seem reasonable. All City departments are being asked to “find efficiencies” to pay for Toronto’s budget deficit. Why not TCHC?

Let me respond by asking some questions of my own.

Why should the City’s tenants be worse off than other social housing tenants?

Residents in the rest of Toronto’s non-profit and co-op housing are protected from arbitrary cuts. Their budgets cannot be trimmed to pay for city services or to subsidize tax cuts for the rest of us.

Housing advocates worked to build these protections into the Social Housing Reform Act, the legislation that downloaded social housing to the municipal level. They knew that as new costs were piled onto the property tax base, cities would inevitably be tempted to raid social housing budgets to fund everything from policing to grass cutting. The legislation enshrined protections that would ensure tenants would not bear the brunt of the cities’ fiscal pressures.

However TCHC, like other municipally-owned housing across Ontario, does not enjoy these protections. I gather there was some hope the rules would change when the province replaced the Social Housing Reform Act with the Housing Services Act this year. They didn’t – and now TCHC and its tenants are entirely dependent on the good will of City Council, TCHC’s sole shareholder.

Why do we act as if Toronto taxpayers are carrying TCHC? 

Toronto City Council may call all the shots but it pays less than half the freight. According to the 2010 Annual Review, TCHC brought in a whopping $266.8 million (net) through rents. The net operating subsidies from the City, after deducting the property taxes and fees TCHC paid into City coffers, was $162.1 million. (1)

The startling fact is that TCHC’s 164,000 tenants have an average household income of $16,200 – one-fifth the Toronto average. Yet together they pay more for TCHC than the City’s 2.5 million citizens combined.

In their negotiations with the Province, municipalities have always argued “say for pay.” Meanwhile, tenants are doing a lot of paying without much saying. Maybe it’s time to recognize them as the true shareholders in the corporation.

Why do we act as if TCHC is a city department? 

It is a corporation. (I’ve noticed that TCHC now likes to omit the “C” that stands for Corporation and call itself TCH. I wonder why. To me, the more it acts like a corporation – independent, pragmatic and de-politicized — the better.)

TCHC was designed to function as a business. Like other businesses, it may have to adjust its budget as circumstances changes. But one of those circumstances should not be an arbitrary government cut.

TCHC’s business is housing. That also makes it different from most city services. The majority of its costs are in hard services. According to the 2010 annual review utilities made up 23% of TCHC’s operating costs; taxes and fees, 21.7%; maintenance, 18.6% and mortgage payments, 18.1%. (Community support services – the work often dismissed as a frill – was a measly 1.7% of the total budget.)

It is not clear how big the cuts might be. TCHC confirms only that “discussions are ongoing, and no decisions have been made at this time.” Depending on whether a 10% cut targets TCHC’s total budget, or only the portion subsidized by the City, TCHC could lose anywhere from $10 – $50 million. The cuts could be offset by Toronto’s Executive Committee’s (excellent!) decision to approve the TCHC Board’s 2008 request to exempt TCHC from the provincial education tax – a savings of $10 million per year.  Or they could cut deeply into basic services.

Could TCHC be more efficient?

I think every TCHC tenant could tell a story about wasted money: about delays that allowed small problems to turn into big ones; of repairs that required repeat visits before they were done right; of tenant consultations that seemed to trail off with no results to show for their work; of policies that took years to develop, yet never seem to be enforced.

However, I believe budget cuts will only make these problems worse. To tackle TCHC’s very real problems, I believe we need to ask more fundamental questions. What is TCHC trying to achieve? Who should it be accountable to? What is the best scale to get the best results? And how can tenants take charge of their own futures?

But that is the subject for an entire series of blog entries.

Questions for city councillors — and for tenants

In the meantime I have two questions I hope city councillors will ask themselves as they prepare for the next round of budget talks:

  • Why should tenants under your jurisdiction receive worse treatment than any other social housing tenant in Toronto?
  • And what will give TCHC a fighting chance to be the success this city needs?

I also have one question for tenants. It’s your home and your money. Why should you have to put with with things that no other social housing tenant does?

I’m asking my city councillor. I hope you do too.

—-

[1] City subsidies might be even lower than the 2010 annual review suggests. According to the 2008 Annual Review – the last to detail the source of government subsidies – 51.8% of TCHC’s income came from tenants; 23.8% from the Federal government or a GTA pool; and 24.4% from the City of Toronto.

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5 Comments leave one →
  1. Aviva Levy permalink
    October 4, 2011 12:53 pm

    What about looking at how TCHC can leverage its other revenue sources? Advertising, market rent, public parking, commercial space, etc. Just a thought.

    • Paul Connelly permalink
      October 4, 2011 9:21 pm

      My understanding is that TCHC does a lot of this already, e.g. by letting the cellphone companies install towers on its properties for an annual fee, billboards on some highly visible properties (including head office), etc.

      • Aviva Levy permalink
        October 4, 2011 9:28 pm

        Yes, they’re already engaged in these projects. But I question why there’s commercial space that’s been sitting vacant in the core for months, unused parking in the financial district, empty market rent units downtown….

  2. Hugh Lawson permalink
    October 17, 2011 3:14 pm

    A couple of clarifications. Overall, Toronto Community Housing’s commercial vacancy rates is about 2%. That compares favourably with a commercial vacancy rate for the City as a whole of about 10%.

    Almost all of Toronto Community Housing’s downtown core parking spots are leased at market rates. In general, Toronto Community Housing’s commercial revenue stream has grown consistently over the past years as the revenue-generating potential of the assets are continuously maximized.

    There are; however, empty market units downtown. There is ongoing marketing for these units.

  3. Aviva Levy permalink
    October 18, 2011 4:02 pm

    Thanks for this, Hugh!

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